Measures to finance new housing project

ISLAMABAD: Finance Minister Asad Umar said during mini-budget speech that easy availability of credit is very important for growth in all sectors of the economy.

“Through this bill, we are proposing tax incentives to promote lending by banks to priority sectors which can spur economic growth and create jobs. These include Small and Medium Sized Enterprises (SMEs), low cost housing and agriculture,” the minister said.

It is being proposed to reduce the tax rate on banks’ income arising out of additional SMEs financing to 20 percent instead of current applicable rate of 39 percent. “The outstanding housing finance is currently less than 0.5 percent of GDP, one of the lowest in the region. To promote low cost housing finance, it has been proposed that a reduced tax rate of 20 percent, instead of current applicable rate of 39 percent, be imposed on income of banks arising out of additional low-cost housing finance above the baseline of financing to this sector in calendar year 2018,” he said. The same tax incentives were announce for banks for extending loans to agriculture sector.